Licensing overview

Overview

Teams is such an integral part of life for Office 365 and Microsoft 365 users that access to the Teams service was always included as part of these plans. However, in October 2023 Microsoft removed it from certain plans and made a separate Teams license available to make sure that customers proactively chose Teams over competitive offerings. It was all change again in November 2025 when Teams was once again available in all plans.

So, today, you have a choice: you can buy a plan such as Office 365 E3 which includes Teams, or one called Office 365 E3 (no Teams) that doesn’t. If you ONLY want Teams then you can buy a Teams Enterprise or a Teams Essentials license – or grab a free license: Teams Free for consumers, or Teams for Education for students or educators. There’s another Teams-branded license too – Teams Premium – which adds a whole host of additional Teams functionality.

Office 365 and Microsoft 365 plans

All of the following plans include a certain amount of Teams capabilities:

• Office 365 E1/E3/E5 and F3
• Microsoft 365 Business Basic/Standard/Premium
• Microsoft 365 E3/E5/E7 and F1/F3

Note that the use of Teams in the Microsoft 365 Business plans has a limit of hosting online meetings and video calls for up to 300 people.

There are a couple of places where you can see exactly which features are included in a particular plan: you can use the Modern Work Plan Comparison documents for Enterprise customers or SMBs, or the Teams service description page.

If you’re trying to work out the best plan that includes Teams you can use our interactive Microsoft 365/Office 365 Plan Picker – an intuitive tool that provides license suggestions based on features that you select.

Teams Enterprise

The notion of a separate Teams license to license access to the Teams service came into being when Microsoft removed Teams from the Office 365/Microsoft 365 plans. They made this change in the EEA and Switzerland first and created a license called Teams EEA in October 2023. That was followed in April 2024 by a license for the rest of the world called Teams Enterprise.

Today these licenses are equivalent, differing only in where you’re located as to which one you buy. Microsoft are a little bit unspecific when they refer to these licenses, usually referring to “Teams Enterprise” when they actually mean both Teams Enterprise and Teams EEA licenses.

You can broadly consider that you get “Teams Enterprise” when you purchase an Office 365/Microsoft 365 plan, with the “300” restrictions for the Business plans as described above. This table in the Learn documentation is useful for comparing core feature availability between SMB, Enterprise, US Government, and Education plans.

Note that Microsoft recommend also licensing users for Exchange Online and SharePoint Online for full Teams functionality.

Teams Essentials

Teams Essentials was announced on December 1, 2021, as a standalone Teams license for Small and Medium Business customers that don’t need the additional productivity features provided by the Microsoft 365 Business licenses. As you might expect, the number 300 is important: you can only buy 300 of these licenses, and you’re limited to hosting online meetings and video calls for up to 300 people.

When Teams Essentials was launched, there were two flavors: Teams Essentials and Teams Essentials (AAD Identity) which you can still see in the Product Terms. If you purchased your license through Microsoft’s website you purchased the “Teams Essentials” flavor and used your Microsoft account identity, and if you purchased through a partner you were licensed with Teams Essentials (AAD Identity) which used Entra ID. Today, there’s consolidation and only the term Teams Essentials is used, but it actually does use Entra ID for identity.

Teams Free

Teams Free is available through Microsoft’s website. It provides a basic set of features for individual home use, with no Commercial Use Rights.

Teams for Education

Teams for Education is free for students and educators with an eligible, active education email address. It’s available either through Microsoft’s website or included in Office 365 A1.

Teams Premium

Teams Premium is the last Teams-branded license to look at and it’s slightly different in that it’s an Add-on license. It can be purchased for any user already licensed with Teams Enterprise/EEA, Teams Essentials, or one of the Office 365/Microsoft 365 plans that include Teams. It adds on all sorts of advanced features which are detailed in the separate Chat, Calling, and Meetings and Events sections.

Teams Premium is the successor to the Advanced Communications license, launched by Microsoft in August 2020. Advanced Communications had similar sorts of aims to Teams Premium – to offer an advanced set of features on top of the regular Teams features – but focused more on enhanced admin control with IT meeting customization capabilities. After the pandemic, work was done to evaluate what customers really needed for their set of advanced features and Teams Premium was made generally available on February, 1, 2023 while Advanced Communications faded quietly away.

The Product Terms

Find the availability of all the Teams licenses in the Product Terms.

AI capabilities

These days, both Teams and Teams Premium licenses include certain AI capabilities, but of course a Microsoft 365 Copilot license enables additional features. The following snippet from a Teams Premium and Copilot Overview deck is useful to compare the AI capabilities across licenses: